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PP and LLDPE futures for the January 2026 contract on the Dalian Commodity Exchange edged lower throughout the morning session on Wednesday, exerting renewed pressure on sentiment across the domestic market.

Domestic polyolefin inventory fell by 35,000 tons from Tuesday, reaching 700,000 tons on 03 December.

While the drawdown provided a marginally supportive backdrop, it failed to offset the drag from softer futures, which slipped after two sessions of gains late last week and on Monday.

In response to the weaker futures board, several local producers issued modest price reductions, though the adjustments had limited impact on transaction volumes. A domestic seller noted that many converters and traders were shifting back into defensive mode:
“Most customers are waiting on the sidelines — they’re not even requesting offers. With futures weakening again, many expect additional discounts. Some key buyers already replenished earlier this week, so they’re in no hurry.”

The recent oscillation in sentiment — from last week’s brief rally to this morning’s downturn — has reinforced a sense of fragility. Buyers remain reluctant to engage, citing thin downstream orders and uncertain near-term direction.

Most market participants anticipate range-bound trading in the coming sessions, with restocking expected only if prices stabilise above last week’s lows. Still, sellers remain wary: the year-end destocking cycle may face headwinds if demand stays tepid, raising concerns over whether inventory reduction targets can be met smoothly before the holiday season.

Written by: Kat Yun Yun

Edited by: Farid Muzaffar

Country
China